However, according to BIMCO, there are signs of stronger volumes for the second quarter of 2015 which are likely to support the freight market.
BIMCO forecasts that the Capesize time charter (T/C) average rates for March/May will be in the range of USD 3,000-9,000 per day.
Panamax T/C average rates will stay around USD 5,000-9,000 per day, whereas for the Supramax segment, BIMCO forecasts freight rates in the range of USD 6,000-9,000 per day. Handysize freight rates are expected around USD 5,000-7,500 per day.
The fourth quarter of 2014 was hugely disappointing for the dry bulk market, ending in complete despair, with Capesize rates diving below USD 5,000 per day in mid-December.
On 18 February, the BDI hit an all-time low of 509; Supramax freight rates were the only ones above USD 5,000 at USD 5,002 per day.
Sign of recovery are also seen as demolition market stirs things up amid extremely poor freight markets.
At the end of February, 68 ships with a combined capacity of 5 million DWT had been demolished since the turn of year, out of which half were of Capesize capacity with an average age of 21 years.
This compares to the 27 years average age of the Handysizes going for recycling. The tough trades of the Capesizes cut their commercial life shorter than that of Handysizes. The extremely low earnings has pushed more ships out of the market, BIMCO said.
However, supply side remains pretty strong. During the first two months of 2015, 11 million DWT of new dry bulk capacity were delivered into the active fleet.
” We have seen the majority being newbuilt Supramaxes whereas the delivery pace of Panamax is now coming slightly down. 54 Handymaxes/Supramaxes have already been delivered by the end of February. This compares to 199 for the full year of 2014 [40,000-67,000 DWT],” BIMCO said.
In the Panamax segment, just 22 ships have been delivered by end-February, as compared to 160 ships (4.6% in annual fleet growth) for the full year of 2014 [67,000-100,000 DWT]. For 2015 as a whole, Panamax deliveries are estimated to go as high as 150 ships (3.3% in annual fleet growth).
According to BIMCO, The troubles in the freight markets have for once also been seen in the order book where interest for new contracts has been subdued. The overall order book dropped to 158.2 million DWT from 168.6 three months ago.
“It remains an imperative for a sustainable freight market recovery that new contracts remain scarce for an extended amount of time. Fortunately, the newbuilding prices offered by the shipyards are still 10-15% above the lowest of 2012-2013 and are not seen as very attractive,” the association went on to say.